IBM has admitted that sales of its Network Station have not matched the expectations of the industry. The so-called slim clients, which come without the baggage of a PC, were supposed to match and surpass sales of desktops.
But the sub-$1,000 units have not been universally taken up by large corporations, with market research company Dataquest claiming that sales in 1997 were just 144,000.
When Larry Ellison, CEO of Oracle, stunned the IT world in 1995 by saying that slim devices would supersede the clunky PC, many industry analysts took him at his word, not realising that economies of scale of PC components, such as hard disks, would drive down prices. Nor could Ellison predict that the bottom would drop out of the DRAM market, further pushing prices down.
Three weeks ago Stan Shih, chairman and CEO of Taiwanese company Acer, said that his company would be able to produce so-called "appliances" at around the $200 mark. In 1995, Ellison touted the figure of $500 for an NC - a price that vendors of these products have had difficulty matching.
A representative for IBM said today that the Network Station had succeeded in penetrating some elements of the corporate market. He pointed to insurance company General Accident as an example. But, he said: "IBM does not give exact figures of products shipped."
Other UK companies, including travel agency Carlson, have bought the IBM NCs but no more than 2,000 have been deployed in this country.
The biggest deal IBM had in the offing was Fedex, which was set to buy as many as 50,000 of the slim clients. But that deal now seems to have been relegated to history as the Asian economic crisis hit projections and the total cost of ownership (TCO) argument began to fall apart.
Compaq, the biggest PC company in the world, quietly relegated its Wintel-based NetPC product, projected to be the answer to the NC, to the back burner earlier this year.
According to the Dataquest report, it is unlikely that even 500,000 NCs, of any flavour whatsoever, will ship in 1998.
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